What is Spend Assessment?
Spend Assessment is about obtaining procurement insights to drive smarter, fact-based and sustainable decisions.
Spend Assessment or Spend Analytics is the process of collecting, classifying and analyzing historical expenditure data to obtain actionable insights to reduce costs, improve purchasing efficiency, and monitor controls and compliance.
Spend assessment should be at the foundation of every procurement function, as it is an important tool to identify savings opportunities, develop procurement strategy and implement category management.
Spend Assessment is all about analyzing, visualizing and understanding a company’s expenditure trends and profile such as:
- What is being purchased?
- How much was paid?
- Who is requesting the purchase?
- How much has been purchased?
- Who are you purchasing from?
- When was it requested?
As procurement becomes more mature and strategic, spend assessments helps companies find new areas of savings that previously went untapped, and hold on to past areas of savings that they have already negotiated.
Read about Future Proofing Procurement in Mining >
Spend and Addressable Spend
Addressable spend represents the amount of spend that is “within the domain of control of the procurement function.” The larger this figure in relation to a company’s revenue, the better.
As companies look for ways to cut costs, the ability to identify areas where the company can increase addressable spend is important as it can potentially uncover millions of dollars in savings.
Non-addressable spend are expenditures that are not within the procurement mandate. Typically includes the following categories:
- Payroll
- Taxes
- NGO’s
- Legal
- Utilities
- Payments to public bodies
- Auditors
- Expenses refund
In Dourado Consulting experience, for mining companies the addressable spend lies between 65% to 80% of the AISC Cost.
Read about Procurement Operating Model >
If you are looking to learn more, contact us
+1 647 936 1458
rafael@douradoconsulting.com
About us
Dourado Consulting is a Strategy Consulting Firm specialized in Procurement.
Dourado Consulting is committed to working together with you, our clients, in order to fully understand your needs, create a personalized approach exclusively made to tackle your unique situation.
We are committed to delivering actionable insights that are pragmatic and sustainable in the long-term.
Our capabilities include:
- Procurement Merger Due Diligence
- Procurement Post Merger Integration
- Procurement Transformation
- Operating Model Design
- Category Excellence
